Obama details capital gains, dividend tax plans

Sen. Barack Obama's campaign on Thursday spelled out the details of the Democratic presidential candidate’s tax plan on his website and in an op-ed piece in the Wall Street Journal.

I just wanted to note the basic proposals for capital gains and dividend tax rates here:

--- Families with incomes below $250,000 would pay current capital gains rates (a maximum tax of 15% on gains on assets held more than one year). Those earning more than $250,000 would face an increase -- a top rate of 20%.

--- The top dividend tax rate would remain the current 15% for those earning less than $250,000, but would rise to 20% for those earning above that threshold.

--- For single people, the tax increases above would apply to those earning more than $200,000.

The presumptive Republican nominee, Sen. John McCain, has endorsed keeping President Bush’s current tax rates as they are.

Comments

[martscan]

Regardless of one's political ideology, the math of this administration's policies can't be denied.

No one speaks of it, but the fact of the matter is that the Bush tax cuts were not only distributionally unfair, but will never pay for themselves. The thought that increased capital formation will lead to new businesses and more jobs is a horse collar. The wealthy in this country have grown so filthy rich they no longer consume in proportion to increases in discretionary income. They have already accumulated everything they want and rarely, if ever, go to Sears for a new stove or K-Mart for socks. Further, to conduct a prolonged war without raising taxes and employing sleight-of-hand accounting practices, i.e., off budget, is nothing short of fiscal madness. And, that the administration always projects deficits larger than they actually end up, and then claims they have been efficient managers, is a fraud upon the public. For McCain to propose continuing these policies is, in my opinion, the height of economic folly.

Contrary to Republican advertising which claims "Obama will raise taxes"(their use of unabashed lies brings to mind Herr Goebbels propaganda maxim of "if the facts don't support your position, change the facts), its been my understanding that in addition to those measures itemized in the article, which do stimulate consumerism, Obama is also considering lower corporate taxes. A recent article has pointed out that thousands of corporations with revenues in the trillions, pay no taxes atall. Aside from the obvious benefit of lowering rates for corporations, a lower rate may induce these non-paying companies to at least pay something, repatriate offshore money and perhaps increase attention to earning greater profits domestically rather than abroad....nah!

[New Guy]

It's interesting to see, but hard to believe any position taken by political aspirants. Turns out they have to get something through Congress. Unfortunately we get what we deserve when we vote for any of them, since we don't allow the ones running to vote on best principles.

[maggie]

Folks in "high rent areas" (read: LA NY, etc.) making 250,000 (pre-tax) per year are far from rich. In LA, merely for safety reasons, a family will need to shell out well over $5,000 per month in mortgage payments. Our property and city taxes are exhorbitant. We pay higher insurance premiums than folks elsewhere. And, if you want your kids to know how to read and write before they hit college, a private school tuition will set you back way more than what our parents paid for college tuition. Rich we're not . Just working 24/7 to live a slice of the American dream. BHO just doesn't get it.

[Kevin]

You can't have a successful economy by keeping with the tune of soaking the rich, which equates to income redistribution. California keeps trying this same methdology, and you are starting to see why the state is now getting hit harder than most of the rest of the country (except Michigan, where they try to soak the rich there too but can't see to find any of them).

The problem with the Bush tax cuts is not with the cuts themselves - it's with the spending that didn't come down. Having a Democrat in the White House along with a Democratic congress will only contribute to massive amounts of additional spending. Just wait and see.

[New Poster]

Does Obama's planned $250,000 threshold for increased capital gains tax rate refer to Earnings outside of the Capital gains realized on sale of residence, stocks etc? In other words, the Capital gain ( after exemption, where applicable..such as residence) is not counted towards determining the $250,000 cap. Could any one clarify?

[FGFM]

"In LA, merely for safety reasons, a family will need to shell out well over $5,000 per month in mortgage payments."

Perhaps they should take Ronald Reagan's advice and move.

[Gene]

I keep hearing about income .. however what will be the taxes on non-income income, pre-tax income, benefits, cash equivalence, tax equalization agreements, constructive receipt, tax gross-up, 162(m), 401(k), 403 (b), 501(c)3, 501(c)4, 409A, "top hat" exemption, 527 groups pay and leadership pay not reported as constructive receipt as it would be for the middle class or as "walking around" pay. FICA & Medicare taxes not paid on benefits and retirement plans .. but collected on savings for retirement saving by the middle class. .. If you wish to talk about equity .. lets talk about the middle class who has to pay for everything with after-tax dollars

[Balanor]

A corporation is a box.
Hopefully that box is full of profits from providing society with the necessities.
The profits might go to R&D which is good. Charitable donations and scholarships might also be increased. That is good.
To leave the box and enter the taxing world, the corporation will fairly distribute dividends to its shareholders The shareholders will pay taxes on those dividends at a rate lower than the normal federal rates. This is good. It rewards shareholders for risking their funds in corporations.
The corporation has to pay income tax on the profits in that box. This is not good. A corporation is a living entity that survives by adjusting its revenue to insure continuity. When taxes, it's mechanism must pass the taxes to the consumer. This is not good. It is very regressive taxation. It means that the poor and the super rich pay the same portion for those taxes through purchase of the corporate products.
The only approach that is fair to everyone is to eliminate the corporate income tax as the tax is paid by the consumer in product price increases.
Or, the corporation should be given the option of paying out the taxable net income to shareholders as dividends AND irrevocably allocating that net income to R&D, charity, hard asset increases(new equipment for profit-making, not new RollsRoyces for executives).

To guard against corporate abuse, a new revised "constructive dividend" code should be employed to insure that all possible dividends are distributed as taxable dividend income to the shareholders. We don't need another Microsoft to hold onto profits for 20 years before declaring a cash dividend to shareholders.

[MB]

I am 52 years old and never in my life time, has one party dominated all three branches of government as the Republican party has since 9/11. The economic problems our country now faces is 100% Republican 0% Democratic. The present economy shows the failure of pro-business, low regulation, reduced taxes on the wealthy policy. Guess what? If you give the rich more, more, more ... they keep it for themselves. They don't let it trickle down. If the Democrats can't make this clear this election cycle, they are dumber than they seem.

[Rudy]

Posted by: Kevin | August 15, 2008 at 09:53 AM
"Having a Democrat in the White House along with a Democratic congress will only contribute to massive amounts of additional spending. Just wait and see."

As far as I remember, the Clinton administration had a surplus..... so as California at that time.

[martscan]

Balanor:

Buy a REIT.

[martscan]

I have no personal animus towards any poster on this blog, however, I consider 'maggie's' remarks an absolute affront, an insult if you will, to any thinking reader of this blog.

To begin, less than 3% of Americans have incomes of $250,000 or more per year. By the relative standards of most Americans, maggie IS rich. Of course, by maggie's standards, compared to the one-hundredth of 1 percent of the population whose 2005 income averaged $29,700,000, maggie is struggling. Pity, but nobody ever said life is fair.

Though $60K in mortgage payments and about $30K in tuition sounds outrageous to average Americans, a great deal of these amounts are deductible, are they not? And aren't these payments of choice? It would seem to me for this kind of dough a family could live in, say, Pasadena, Glendale or hundreds of other highly suitable locations in LA County besides the West side, and construct a veritable fortress "merely for safety reasons." As to taxes, I can only imagine that she refers to ad valorem taxes which, considering rates in other states, is a flat out bargain. And her insurance is high because she has more expensive things, which her income affords, to insure.

Maggie, I know, with only perhaps $5K to $10K of monthly discretionary income, things are tough. But things are tough for the 133 million or so households with incomes less than 1/5th of yours. But, what the hell, they can always eat cake.

[misscds]

I have a hard time sorting through all the baloney, but I do have a few things on my mind. I come from a lower middle class family my single mother made approx. 15,000/yr as a hairdresser/business owner and my child support paying father made about 40K/yr but I wouldn't necessarily say we benefitted much from his income. I went to college with the dream of becoming a successful engineer, only to find out I would hit many glass ceilings along the way and really will never be wealthy in this profession, but I feel good about what I do everyday for about 50K/yr. You would assume I would support Obama and his tax plan, but here is the catch. Two years ago I married a man who although has over 100,000 in debt from 7 years of post-graduate education makes around 250,000/yr as a medical servant. He works very hard and deserves every penny he makes in my mind. He gives so many discounts and deals to his patients he probably could make thousands more if he wanted. We chose to live in an area with lower housing, taxes, insurance, education costs to make the most of both of our salaries. So now I ask you who do I vote for? We work hard for our money but have much debt to pay for our expensive educations that got us these great jobs, thus we need every penny we make. I too feel insulted by "Maggies" post because though we make the same income as her, We do not live beyond our means! Mainly so we can save large sums of money for retirement and our children's future (most likely very expensive) education. Obama wants to tax the money we SAVE and the money we EARN and the money we have invested in our home to make improvements and maintain it so someday we can maybe sell it and move into something smaller for retirment. We have family who needs the tax breaks Obama declares, but also family who will lose alot with Obama's plan. I feel so pulled and decided I would base my vote on which guy would have a better education plan, since as we all know American children aren't getting any smarter these days. Someone please help me break through the baloney and find the filet mignon we need to get this country proud again!

[Chris]

Misscds:

I really enjoyed your post, it was very honest. Now, to be honest with you, your worries about money pale in comparison to most Americans. As some stated above, 3% of Americans have incomes over $250,000.

Los Angeles, New York, San Francisco are all extremely expensive cities. housing, auto, insurance, private school, groceries, etc. all add up. I know, I once lived in Los Angeles.

The situation is very complicated. You may feel like at times you are strapped and money doesn't flow as you would like. Both the schooling that you and your husband had deserves compensation to follow. However, most people don't even have the opportunity to go to college, to get where you have got.

Obama tax plan, if you were to read it and understand it will not be drastically different from today. Capital Gains taxes, if changed, will not impact you very much. A la the 1031. Invest elsewhere, it will help you in the long-run. The 1031 is the reason why the housing/investment boom took off following Clinton's cut.

Obama is your man if you think about education. Public education is the greatest asset the American people have. Although, many schools are in poor condition in LAUSD, and many fortunate people have the private option, many do not. McCain's option for education is a temporary patch, in an effort to completely dismantle public schooling. We can't blame students, we can't blame teachers, public schools have been historically underfunded and devalued for years. Obama wants to restore public school, as he realizes what it means for America's future. We will fall behind the rest of the world even further if we don't get it together.

I encourage you, to sit back, think about your life and think about many others who are less fortunate. These people work incredibly hard and earn nothing, things are not equitable.

Do me a favor, drive down Sunset from Beverly Hills to Downtown. See the plight and how people struggle everyday. McCain's policies will continue to rerail America's people and its future.

Obama was a community organizer, we need his wisdom to help reshape American. We need compassion, and less greed and selfishness.

[Ev Helm]

Other than Congress not reducing spending, keeping interest rates so low by Greenspan and following by Bernake has done little to help the middle and low earning Americans. Interest rates are taxed at regular income rates, retirees rates are higher than when they worked due to IRA Distributions taxed at normal income rates, preferred stock dividends/interest is taxed at normal income rates, while the value of those assets continue to drop in value. All of this negatively impact middle Americans who thougt they were being conservative in their investments. And now both parties are protecting the assets of those whose income is over $200k/year. Keeping interest rates low hurt us. Those reaping benefits primarily did nothing to help 'working' Americans.

[Byron Liles]

Like many people, my main concern is for my children (all above voting age). I turn 65 this month but still contribute to a daughter who is a single mom, a daughter who has a low pay job and trying to go back to school and a son who lives at home but pays most of his expense with a low pay job. Both girls (who share a home) are strapped financially as the oldest lost her high pay management job in July. They are both Oboma girls as they like what he says. Setting asside my fear of socialism, I like his health plan since I have dropped enormous sums for medical over the past 20 years and I hope my children fare better.

Getting to my comment on capital gains. Unlike most people who's only experience with capital gains is the sell of a primary home which has a large exemption or flipping of property and utilizing the 1031 like exchange, I actually sold a rental property that my brother and I had held for 20 years. It never made us a dime as we could only get minimum rent due to the age but it provided deductions and paid expenses. Beging fully depreciated we paid cap gains on the full sale price, which was fine with us. My only problem is that it was lumped in with my ordinary income, thus making me appear to be a high earner ($350,000. to be exact). This caused me 3 years later (after making up for 20 years of tough times) to pay a 1 year monthly surcharge ($106.) for medicare. It also caused me to lose some deductions on my tax. Would Sen. Obama's plan going to consider the combined $350,000. as being over the threshold since it would show as ordinary income?

[Cal Couillard]

I found the previous posts interesting. I can see both sides of this issue, and find myself in the middle. I was born into a Republican hating, 8 children Catholic household, in a small Wisconsin town. I did'nt consider us to be rich or poor, but with that many brothers and sisters, we were what I would call lower middle class, monetarily. I was lucky. I started my own business, and did well by most people's standards. Now that I make more money than I ever dreamed of, I see the tax system from a different perspective. It is tilted in my favor without question. In the 90's, the long-term capital gains tax rate was 28%, now it is 15%.
That's good for me.
Social Security payroll taxes stop at $90,000.
That's good for me.
Putting the maximum money into a 401K plan,
that's good for me.
But I am concerned about something else. Not taxes. Spending! All the politicians talk about is the tax side. I find the Republicans willing to spend more than they bring in to be surprising. I was always taught that the big spenders were Democrats. It is still the Republican line! The truth is that the national debt went from 0 in 1930 to 1 trillion dollars in 1980. Republicans controlled the Presidency 20 of the next 28 years. A Democrat was President from 1992-2000. During those 8 years, we had a couple of years without deficit spending. That was the only time in the last 78 years that we haven't had deficit spending by the Federal Government of the United States.
The national debt has gone up 8.5 trillion dollars in the last 28 years, almost every drop with a Republican President in control.

We need a President that uses the veto to control spending. The President of the United States has more power then the House and Senate combined.
We will never get control of taxes without getting control of spending. Are taxes fair? No. BUT, WE NEED TO ADDRESS THE REAL PROBLEM, DUMPING ALL THIS DEBT ON OUR CHILDREN. Everytime we lower taxes, we dump a little more debt on the kids. Are we baby boomers ever going to stop this practice? We need to return to a simple concept, spend no more than you bring in.

As far as taxes to me personally, I am better off to vote for McCain than Obama. It is clear to me that he will put more money in my pocket. But what about the fiscal health of the United States and its citizens? I don't see either candidate willing to do anything about controling spending. Remember that guy who said, "Ask not what your country can do for you, but what you can do for your country?" My daughters have to live here! I feel like I am leaving them with a huge mess(the national debt) to clean up! I am not sure why more Americans are not appalled by this issue. In fact, it is a non-issue in the campaigns.

Who is the best candidate for President of the United States when it comes to fiscal responsibility? Is there a candidate out there that will address this issue?

Cal Couillard

[Jake Jones]

What are obama/McCain's plans for estate tax? I believe that cap for 2008 is $2,000,000, and the cap for 2009 is $3,500,000. After that, the tax rate is 45%.

Except for the appreciation factor, estate funds are already taxed. Meaning - when you die, your assets have already been taxed once.

Lower the cap and the rates? No cap, low rate like capital gains? No death tax?
What's fair?

[Craig]

Ten years ago I was a struggling medical student 90,000 dollars in the hole. I spent 3 years in residency training - working my ass off for 35,000 dollars a year. At age 30 - I started drawing a decent paycheck in private practice and am making just over the Obama magic number of 250,000. I gladly pay a larger percentage of taxes than most of the country. I pay for social security that I will likely never have to use. I support my elderly parents who sacrificed so much to get me where I am today. I have one nice house in a neighborhood with good public schools for my newborn son. My budget for retirement, mortgage, son's education and support of my parents is based on a fairly fixed to slightly declining income over the next few years (thanks to Medicare payments and non-paying patients) Why am I suddenly being asked to shoulder a bigger burden than everyone else? I ALREADY pay more taxes than 97% of the country - a good chunk of it for services I will NEVER use. I remember being poor - and I never begrudged the wealthy their hard-earned success - because that was where I saw myself someday.
The current tax code does not allow me to deduct my student loan debt because of my income, nor does it allow me to deduct the cost of caring for patients - when 30% of them will never pay a dime for that care, but I cannot write that off as a loss.
I seriously doubt most hard-working professionals who heard Barack Obama say that folks making more than 250,000 a year should pay more "because they can afford it" were terribly excited since they ALREADY PAY MORE.
Take away the incentive to work harder by taxing success and see what kind of doctors end up treating your illnesses and attorneys defend your legal problems. 250,000 is an arbitrary number that Obama chose to dupe most of his middle income supporters.

[martscan]

Craig:

I can commiserate with you, in spades. But I don't begrudge paying what is a disproportionate share of my income in higher taxes, relative to middle income earners, and I'll tell you why. My father, an immigrant, worked well into his 80s and every single penny he made in his lifetime was earned as a result of his sweat, SWEAT! He worked for himself as a painter, an Irish painter that didn't drink (I'm a genetic anomaly). At 75, six weeks after having a lung removed, six weeks! I found him working in 90 degree heat carrying a 20' wooden ladder, upright, to reach the eave of an old Victorian house. My mother, a housewife, and he had no bills, raised 5 responsible citizens, never hurt anyone and died at 90 with a cigarette in his hand and $250K in the bank. Because of his sweat, I have made $250K, and more, sitting on my ass in an air conditioned pad with no more effort than lifting a god damn phone...in under an hour. Craig, I really don't have to finish this story, do I?

[Michael Edwards]

Everybody wants something don't they. But how many people in this post have thought about giving something back. Its not very fashionable nowadays to help anyone else, is it? What exactly does this country stand for? What should it stand for? Power? Authority? Being right even when we are wrong? What exactly are our roots.

The wealthy want to hang on to their profits. Many of the poor want a free ride. Both have a sense of entitlement. Everyone claims they have had it harder than the rest. The rich had to work sooo hard to get their money. (Most of them made it on middle man deals and speculation). The poor claim they are the victims that must be taken care of by the rich. Neither thinks of what they can do to help the whole country, just what will serve them. This is the essence of the country we have become. Everybody wants something for themselves or creates the argument about how much they deserve.

We have created a government that has grown to such proportions that it is a giant behemoth that requires an incredible sum of money to operate. Thus taxes.

Democrats want to bail out the poor and middle class. Republicans want to bail out rich individuals and large businesses. Where does the responsibility lie for funding the behemoth government.

"We hold these truths to be self evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. (What is happiness? Being Rich?) (Anyone who believes that should recheck their value system)
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers into such form, as to them shall seem most likely to effect their safety and happiness."

Revolutionary words. In other words "fire the coach". "Fire the players" and lets rebuild a new team that has more talent, intelligence and chemistry to win the Super Bowl."

So admitting what is wrong (self criticism) and taking steps to change it is a Patriotic Idea.

We have to decide who pays the taxes and how. Apparently we do that through elected officials, who are supposed to be smart enough to act in our best interest. (however, once again, many of these people are swayed by special interests and act with selfish motivation). Neither of which are in the best interest of the country.

So who should pay the taxes. We all have to pay taxes. If you got rich in this system you need to put money back. If your poor or have hard times you should get a leg up so you can contribute, not an entitled free ride. And we should all work at making sure there is government accountability and reduce wasteful spending whenever possible. If we could run this country with no taxes that would be great but obviously we can't.

Unless we have a revolution and throw out the whole government and start over, Government in our lives is inevitable. Its already there and not likely to go away anytime soon. So unless someone thinks of an alternative way to fund the government, taxes is how we must do it.

If our representatives are not acting in the best interest of the country, if they are acting in their own interest, or if they fail at their job in being good stewards of our country, then its time to fire the coach, fire the team and get some good people in there to do the job right.

[charles]

Obama's tax plan will destroy the Social Security system.

Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama's response to this is that these people pay Social Security tax. Well, that's not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.

This will cause Social Security to lose public support in a massive way. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.

http://strategicthought-charles77.blogspot.com/2008/10/obamas-tax-plan-will-destroy-social.html

[Rocky]

A lot of successful people in LA, NY and SF will be paying more in income taxes next year, maybe a lot more. They may not consider themselves especially rich, given the high cost of living in these three cities, but BHO thinks they are and so do his fellow travelers in Congress and that's all that matters. But the folks at ACORN, Operation Push and other anti-poverty groups will see their funding go up. Maybe next time these successful Democrats will vote Libertarian. If you are a retired widow living in your own home which you have owned for many years, you will probably end up with a very high income tax bill when you go to sell you home to move into a retirement facility.The homeowners capital gains exemption for a widow is only $250,000, not very much if you have lived in the same place for 30+ years. But BOH and Congress will consider you high income and that will be all that matters. There goes much of your nest egg.

[Disappointed]

The biggest misconception is that the increase in the capital gains tax will actually increase revenue. When the Bush tax cuts happened, the capital gains revenue actually shot up dramatically (and has stayed there), not lower. To see why, realize that capital gains are very easily deferred - you don't sell that investment, you buy hedges, you take stock in a new business as payment when you sell your business, etc..., so they're very much elective. So when you raise the capital gains tax 33% (which is what 15% to 20% is), people become much less likely to take gains.

With dividends, what happens is that has people sell those stocks now and put the money into tax-free munis instead - since the after-tax return becomes much higher. So once again, revenue doesn't go up, and in fact goes down, since no tax is being paid vs. some before.

That's not as true of taxes on salaried income, where it really does result in new revenue. The problem is the people who are taxed tend to spend and invest less, which tend to lower real wages for others. For example, if I have to pay $10k more in taxes, that $10k comes out of the salary for the office manager or the housekeeper, or going out to eat once a month instead of 2-3 times a month - all of which results in relatively lower income folks having fewer hours and/or lower wages, hurting the very people it's supposed to help.

Where it's particularly devestating is in investments - far fewer new company investments (or additional investments in existing companies) make sense when the return is lowered by 33%, so it becomes harder to raise capital that can be used to create jobs and growth. So a company that might have been able to raise $1m to create 20 jobs, finds itself able to only raise $500k to create 10 jobs because the investors don't believe they'll get a suitable return - and a whole bunch of companies are now not investable because tax-free munis provide a safe and better return, and all those potential jobs go away.

Unfortunately, there's no free lunch and spreading the wealth tends to lessen the overall wealth to spread.

[Real Estate Dude]

Even though I'm a Democrat, I've got to agree with Disappointed.

Obama wants to fund all his programs through tax increases,

I like the idea of Obama's spending plans, especially the one to create hundreds of thousands of jobs in alternative energy. It's just too bad he can't use tax incentives instead of tax increases to achieve his goals.

I love Obama, but raising taxes on folks like the young doctor who posted above is not the way to achieve his aims.

I say only increase taxes on folks making over one million a year and don't raise corporate tax rates at all.

If Obama can't raise enough money to support his new programs, unfortunately he'll have to scale back his plans. . . what's the big deal?

I'm just happy Bush will finally be out of office. Obama will be fun to watch.

[Andrea G]

Dear Disappointed and Real Estate Dude:

I am a life long Democrat (whatever that means, I'm only 37) and I agree with both of your comments. My husband and I earn 289,000 income, he's a lawyer and I'm a nurse practitioner (with two master's degrees), in total we have 170,000 in student loans as we both came from families too poor to pay anything at all for our schooling.

Trust me we are a far cry from rich (those student loans total about 1300/month in payments). We agree with paying our fair share and in fact paid in 55,000 in Federal income taxes alone in 2007 (I believe 20k in state tax not including 8000 in property taxes). The tax increase we will face is not necesarily the problem, yes I feel we pay too much, since we also send our kids to private school and receive no benefit from public schools but we will pay "our fair share" whatever that turns out to be?

The real issue for everyone and a fatal mistake of the Obama tax plan is corporate tax increases. These increases will impact everyone and i cannot believe folks don't get this. Do they really think that by taxing the big bad corporations that prices for goods and services will stay the same? Absolutely NOT! In fact, all tax increases for businesses are passed on to the consumer whether or not it is a Chinese restaurant, Target or Exon Mobil. If these businesses pay higher taxes they will either lay-off workers, raise prices or do both to maintain their incomes. As everyone should realize publically traded businesses are beholden to their shareholders not the their employees and business owners are beholden to themselves. Raising taxes on businesses will increase the jobless rates, when people are already struggling. That's why Obama's plan needs to be revised. It will ultimately hurt those who need help the most. Trust me paying a little more in taxes will not cause me to go hungry or lose my house (we may tighten our spending) but losing a job when you're earning 30-50k a year could lead to homelessness. Moreover, a $500-$1000 rebate check won't fix a whole lot for those who are suffering after losing or job or facing a foreclosure.

People are getting swept up with the emotion and idea of fairness, but they're not thinking rationally or logically on how this will really impact them?

Short term and easy gains often times lead to long term loses.

[Kilroi1]

Wow, the last three posters simply nailed it, and it's refreshing to see that two of the three are "Democrats." It's no doubt that Obama is the superior orator and that McCain doesn't seem to "get it" either, but the combination of higher taxes on wages at the top and higher capital gain and dividend taxes will drive small business's out of business, and large business's overseas when coupled with increased unionization and increased regulation from an Obama White House. The wealthy are always going to be wealthy no matter what, but punishing them for their wealth creation will be exactly like cutting off ones nose to spite ones face.

[Christine@bondifamily.com]

I agree with Andrea G. It is also important to remember that while less than 2% of us actually earn above the $250,000 income level, it is primarily because we took out the students loans to become very well-educated. It is also important to remember that if Obama decides to increase our dividend rate from 15% to 20%, we will not take dividends during this period. I'm sure most individuals who look at the situation agree, its better to not take the dividend than pay the extra 5% if he passes this legislation. It truly is an extra punishment for working hard.

[Phrenologist]

I believe the country could benefit from drawing a thick line between the terms "investing" and "trading" as it applies to capital gains taxation. If we use the time frame of 1 year, which currently defines long term capital gains, we can begin to properly incentivize investments and disincentivize trading. Trading doesn't help the real economy and should not be rewarded with tax breaks. As a country we should be looking at capital gains tax rates for trading starting at 35% and moving up to about 50% for gains on short sales. Then we could cut the capital gains tax rate on actual investment to 10% and still generate more tax dollars while increasing actual investment and improving the real economy.